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Adrian Day: Broken Bond Market

Mining Network Sep 29, 2026 37:44

Summary

Adrian Day argues the 30-year Treasury near 5.5% shows the bond market is close to broken, with too few buyers willing to lend long term.

Gold is holding up against a strong dollar, rising oil and higher yields — which he reads as confirmation that the bond market is strained.

He expects the Fed to become buyer of last resort for Treasuries, a step he says would be inflationary and justify gold ownership.

Beaver Creek mining companies are well cashed up and senior producers are again eyeing early-stage projects, without the reckless 2011-era deal-making.

He discloses a long position in Origin Royalties, a junior with cash and a royalty (a revenue share) that avoids dilution.

Key points on Anglogold Ashanti

  • The guest notes AngloGold Ashanti took over the Silicon deposit project, where he puts the resource at around 20 million ounces.

Key points on First Majestic Silver

  • Orogen's royalty cash flow comes from the Ometeño mine, described by the guest as First Majestic's flagship mine in Mexico.

Key points on Orogen Royalties Inc

  • The guest, a longtime large shareholder, argues Orogen's C$30 million in cash plus royalty cash flow leave it able to avoid raising money again — ending the dilution that normally burdens junior explorers.
  • Last year it sold its Silicon deposit royalty to Triple Flag in a deal structured with a spin-off for tax reasons; AngloGold Ashanti has since taken over the project, where the guest puts the resource near 20 million ounces.
  • It collects royalty cash flow from the Ometeño mine, First Majestic's flagship mine in Mexico, which the guest cites as the other pillar of its strong balance sheet.
  • The guest says the balance sheet now lets it diversify beyond prospect generation: a recently purchased Nevada project it plans to option out, and a $500,000 three-year stake in an Irish-run prospect generator active in Norway and Finland.
  • The stock has risen from about $30 last year to over $50, but the guest cautions investors never to confuse price with value and says he wants to buy more.

Key points on Triple Flag Precious Metals Corp

  • Last year Triple Flag bought Orogen's Silicon deposit royalty through a transaction that included a spin-off for tax reasons.

Adrian Day's takeaways

  • Top takeaway The guest argues the US bond market is close to broken — there are not enough buyers willing to lend to the government for 30 years at roughly 5.5%, with 30-year yields at their highest since 2004 as of the interview and China and Japan selling.
  • He predicts more financial repression, possibly 401(k)/IRA mandates to hold Treasuries, and expects the Fed to end up buying the Treasuries no one else wants — the inflationary dynamic he says explains gold holding up despite a strong dollar, rising oil, and higher yields.
  • He argues the Fed has little room to keep raising rates: interest payments are roughly doubling as debt rolls over and already exceed defense spending, private credit and commercial real estate face more defaults, and credit card rates near 24-26% are squeezing paycheck-to-paycheck households.
  • He expects Democrats to win the House, with the Senate more up for grabs, leading to more executive action, impeachments and lawsuits, and a worse climate for business investment and budget deals.
  • He describes the mood at Beaver Creek as upbeat — companies are well cashed up and M&A is sensible rather than a repeat of 2011-12 — and names Orogen Royalties, which he owns, as the standout story.

Scott Bessent's takeaways

  • Top takeaway The guest argues Treasury Secretary Bessent's interventions in the bond market and the yen have backfired, with the market signaling he did not do anywhere near enough.
  • He credits Bessent with scrambling for incremental Treasury demand — regulated stablecoins, bank reserve requirements — but says each is a small piece against roughly $4 trillion of annual interest servicing.